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Direct taxes
Corporate tax - a flat tax rate of 10%, which is levied on book profits converted to tax permanent and temporary differences.
Payable with the annual adjustment to March 31 next year. It shall be paid in advance monthly or quarterly advance payments. You can avail tax benefits in cases of investments in areas with high unemployment rate or employ an unemployed persons or reassigned.
Withholding tax - levied on various types of income: dividends, sale of shares, sale of real estate, royalties, and other technical services payable by residents to foreign entities. The rate is 10% on the total amount of realized income. Dividends and liquidation shares are subject to a 5% tax rate. In applying the system to avoid double taxation / DTT / these tax liabilities can be reduced. Not subject to withholding are incomes from dividends and liquidation proceeds in favor of companies that are resident for tax purposes in the European Union. The tax rate is 5% for interest income and royalties received by local entities classified as such under the European Economic Community / generally it is 10% /.
Tax on expenses - This direct tax is levied on entertainment expenses related to the activity; social expenses provided in kind to persons employed under the management and control, as well as costs associated with the operation of vehicles where used to carry out management activities.
Alternative Taxes - Income from gambling revenues, budgetary enterprises and business of operation of ships is subject to alternative tax that replaces the corporate tax.
Personal Income Tax - Taxable income of individuals, with the exception of income from dividends and liquidation proceeds, are taxed at a flat rate of 10%. Tax on such income is formed by deducting contributions for compulsory social security contributions up to a certain amount of voluntary insurance and the cost of certain types of donations to a certain amount, according to the norm of law. Bulgaria does not tax the following income: the sale of a property acquired more than three years earlier; sale of two real estate acquired more than five years earlier; sale of movable property, with certain exceptions; disposal of financial instruments offered on regulated markets in Bulgaria and the EEC; compulsory social insurance in Bulgaria or abroad.
Mandatory contributions - They amount to approximately 30% of gross income. They are distributed between employer and employee in 60:40 ratio. To determine the tax base for income taxation of individuals, from the gross income is deducted the part of personal contributions.
Contributions to funds for 2014
• 12.8% for the "Pensions" fund
• 5% for SMPS in "Universal Pension Fund"
• 0.4% - 1.1% for the "occupational accidents and occupational diseases' fund
• 3.5% for the "Sickness and maternity" fund
• 1% for the "Unemployment" fund
• 8% for the "Health Insurance" fund